Jim Zellmer's View from Madison

Menu

Daily Archives: November 23, 2012

When Sharoda Paul finished a postdoctoral fellowship last year at the Palo Alto Research Center, she did what most of her peers do — considered a job at a big Silicon Valley company, in her case, Google. But instead, Ms. Paul, a 31-year-old expert in social computing, went to work for General Electric.

Ms. Paul is one of more than 250 engineers recruited in the last year and a half to G.E.’s new software center here, in the East Bay of San Francisco. The company plans to increase that work force of computer scientists and software developers to 400, and to invest $1 billion in the center by 2015. The buildup is part of G.E’s big bet on what it calls the “industrial Internet,” bringing digital intelligence to the physical world of industry as never before.

The concept of Internet-connected machines that collect data and communicate, often called the “Internet of Things,” has been around for years. Information technology companies, too, are pursuing this emerging field. I.B.M. has its “Smarter Planet” projects, while Cisco champions the “Internet of Everything.”

MUNICH — In 1987, a recent engineering graduate named Norbert Reithofer wrote a treatise that in retrospect reads like a manifesto for the German economy. The only way manufacturers in a high-cost country with few natural resources could survive, he argued, was by becoming the most flexible and efficient in the world.

Mr. Reithofer, now 56 and chief executive of the automaker BMW, has since put that principle to work with a vengeance, delivering consistent profit through two crises and becoming something of an icon of the revival of German industry.

Though continuing to build roughly 60 percent of its vehicles in high-cost Germany, BMW reported another rise in quarterly profits this month despite the worst downturn the European car industry has had in decades.

As the auto crisis shows signs of spreading to the premium market, though, Mr. Reithofer faces a test of his management skills that will have implications for the whole nation. Cars are Germany’s largest export product. But the losses that companies like Fiat, Ford and General Motors have been piling up in the region raise fundamental doubts about the future of automobile manufacturing in Western Europe.

On a visit to Standard Motor Products’ fuel-injector assembly line in South Carolina, Atlantic writer Adam Davidson asked why a worker there, Maddie, was welding caps onto the injectors herself. Why not use a machine? That’s how a lot of the factory’s other tasks were performed. Maddie’s supervisor, Tony, had a bracing, direct answer: “Maddie is cheaper than a machine.”

Davidson’s complex, poignant story, Making It in America, revealed some chilling data about where American manufacturing is headed. It’s a matter of simple math. Maddie makes less in two years than a $100,000 machine would cost, so her job is safe—for now.

Elsewhere in America, robots are getting cheaper and more sophisticated, and they’re landing better, more advanced jobs. They are driving cars, writing newspaper articles, and filling prescriptions, displacing people with years of schooling and training under their belts. It sounds like a classic sci-fi story, but that disconcerting future isn’t in the future. It’s here today.